Cassirer v. Kingdom Of Spain

616 F.3d 1019

Claude CASSIRER, Plaintiff-Appellee,

v.KINGDOM OF SPAIN, a foreign state, Defendant,andThyssen-Bornemisza Collection Foundation, an agency or instrumentality of the Kingdom of Spain, Defendant-Appellant.

Claude Cassirer, Plaintiff-Appellee,

v.Kingdom of Spain, a foreign state, Defendant-Appellant,andThyssen-Bornemisza Collection Foundation, an agency or instrumentality of the Kingdom of Spain, Defendant.

Nos. 06-56325, 06-56406.

United States Court of Appeals,Ninth Circuit.

Argued and Submitted March 24, 2010.

Filed Aug. 12, 2010.

COPYRIGHT MATERIAL OMITTED.

Appeal from the United States District Court for the Central District of California, Gary A. Feess, District Judge, Presiding. D.C. No. CV-05-03459-GAF.

Thaddeus J. Stauber, (argued), Walter T. Johnson, Nixon Peabody LLP, Los Angeles, CA, for defendants-appellants Thyssen-Bornemisza Collection Foundation.

William M. Barron, Smith, Gambrell & Russell, LLP, New York, NY; Anthony A. De Corso, Beck, De Corso, Daly, Kreindler & Harris, Los Angeles, CA, for defendant-appellant Kingdom of Spain.

Stuart R. Dunwoody (argued), Catherine E. Maxson, Davis Wright Tremaine LLP, Seattle, WA, Victor A. Kovner, Davis Wright Tremaine LLP, New York, NY, for the plaintiff-appellee.

Before ALEX KOZINSKI, Chief Judge, PAMELA ANN RYMER, ANDREW J. KLEINFELD, SIDNEY R. THOMAS, BARRY G. SILVERMAN, WILLIAM A. FLETCHER, RONALD M. GOULD, RICHARD A. PAEZ, CONSUELO M. CALLAHAN, CARLOS T. BEA and N. RANDY SMITH, Circuit Judges.

OPINION

RYMER, Circuit Judge:

Claude Cassirer is an American citizen whose grandmother's Pissarro painting was allegedly confiscated in 1939 by an agent of the Nazi government in Germany because she was a Jew. He filed suit in federal district court to recover the painting, or damages, from the Kingdom of Spain and the Thyssen-Bornemisza Collection Foundation, an instrumentality of Spain, which now claims to own the painting. Spain and the Foundation moved to dismiss, asserting, among other things, sovereign immunity pursuant to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602, et seq. The FSIA makes a foreign state immune from suit in the courts of the United States unless an exception applies. The district court denied the motions, Cassirer v. Kingdom of Spain, 461 F.Supp.2d 1157 (C.D.Cal.2006), and also denied motions to dismiss for lack of a case or controversy, personal jurisdiction, and proper venue. Spain and the Foundation appealed, raising most of these issues.

Cassirer relies on the “international takings” or “expropriation” exception in the FSIA that confers subject matter jurisdiction over a foreign state when “rights in property taken in violation of international law” are at issue; the property is owned “by an agency or instrumentality of the foreign state”; and the instrumentality “is engaged in a commercial activity in the United States.” 28 U.S.C. § 1605(a)(3). Spain and the Foundation maintain that this exception is not applicable because the painting was taken in violation of international law by Germany, not by either of them, and because the Foundation is not engaged in commercial activity in the United States sufficient to trigger the exception. Spain contends that Cassirer should have exhausted remedies in Germany or Spain, but failed to do so. Spain also contests the existence of a case or controversy, while the Foundation challenges the exercise of personal jurisdiction.

Our review is constrained because this is an appeal before final judgment has been entered. Generally, we may review only final decisions of a district court, but our jurisdiction also extends to a small category of collateral orders that are separate from the merits and can't effectively be reviewed on appeal from a final judgment. A ruling that denies sovereign immunity is such an order. Consequently, we may hear the appeal taken from the district court's order denying the motions to dismiss for lack of subject matter jurisdiction based on sovereign immunity. But its decision declining to dismiss the action for lack of personal jurisdiction and a case or controversy is fully reviewable on appeal after judgment. For this reason we have no appellate jurisdiction over these issues, and will dismiss the appeal as to them.

On the issue of sovereign immunity, we conclude that § 1605(a)(3) does not require the foreign state against whom the claim is made to be the one that took the property. We are satisfied that the record supports the district court's finding of a sufficient commercial activity in the United States by the Foundation. The statute does not mandate that the plaintiff exhaust local remedies for jurisdiction to lie, and we do not consider a prudential exhaustion analysis given our limited appellate jurisdiction. This being so, we will affirm the order that the expropriation exception applies such that the court has subject matter jurisdiction over the action as to both Spain and the Foundation.

I

The property at issue is an oil painting by the French impressionist master Camille Pissarro, Rue Saint-Honoré, après- midi, effet de pluie. ¹ It was completed in 1897 and sold in 1898 to Cassirer's great-grandfather, Julius Cassirer, who lived in Germany. The painting remained in the family for some forty years, eventually passing to Lilly Cassirer, Cassirer's grandmother, upon her husband's death. She later remarried.

In 1939 Lilly decided she had no choice but to leave Germany. By that time-as the district court judicially noticed-German Jews had been deprived of their civil rights, including their German citizenship; ² their property was being “Aryanized”; and the Kristallnacht pogroms had taken place throughout the country. Permission was required both to leave and to take belongings. The Nazi government appointed Munich art dealer Jakob Scheidwimmer as the official appraiser to evaluate the works of art, including the Pissarro painting, that Lilly wished to take with her. Scheidwimmer refused to allow her to take the painting out of Germany and demanded that she hand it over to him for approximately $360. Fearing she would not otherwise be allowed to go, and knowing she would not actually get the money because the funds would be paid into a blocked account, Lilly complied.

Scheidwimmer traded the painting to another art dealer, who was also persecuted and fled Germany for Holland. After Germany invaded Holland, the Gestapo confiscated the painting and returned it to Germany, where it was sold at auction to an anonymous purchaser in 1943. It turned up at a New York gallery in 1952 and was sold to a St. Louis collector; it was sold again in 1976 to a New York art dealer who, in turn, sold it to Baron Hans-Heinrich Thyssen-Bornemisza. Bornemisza lived in Switzerland and was a preeminent private collector.

In 1988, Spain paid the Baron $50 million to lease his collection for ten years. Five years into the lease, Spain paid the Foundation $327 million to purchase the entire collection, including the Pissarro painting. As part of the agreement, Spain provided the Villahermosa Palace in Madrid to the Foundation, free of charge, for use as the Thyssen-Bornemisza Museum.

Claude Cassirer, Lilly's heir, discovered in 2000 that the painting was on display at the Thyssen-Bornemisza Museum in Madrid. He asked Spain's Minister for Education, Culture and Sports, who was chair of the Foundation's board, to return it. The request was refused. In 2003, five members of Congress wrote the Minister requesting return of the painting; this request, too, was rejected. Cassirer did not try to obtain the painting through judicial proceedings in Spain, or to pursue other remedies in Spain or Germany, before bringing suit in the United States.

He filed this action against the Foundation and Spain in the Central District of California on May 10, 2005. The complaint avers that Germany confiscated the painting based on Lilly's status as a Jew and as part of its genocide against Jews; hence the taking was in violation of international law. It alleges that the Foundation is engaged in numerous commercial activities in the United States that include borrowing art works from American museums; encouraging United States residents to visit the museum and accepting entrance fees from them; selling various items to United States citizens including images of the painting; and maintaining a web site where United States citizens may buy admission tickets using United States credit cards and view the paintings on display, including Rue Saint-Honoré, après-midi, effect de pluie. The complaint seeks imposition of a constructive trust and return of the painting or, alternatively, recovery of damages for conversion.

The Foundation filed a motion to dismiss based on lack of subject matter and personal jurisdiction, and improper venue. Spain followed with its own motion to dismiss. The district court allowed Cassirer to conduct jurisdictional discovery into the Foundation's commercial activity in the United States. Both motions were then denied. The court certified the matter for interlocutory appeal under 28 U.S.C. § 1292(b), though Spain and the Foundation abjured this route in favor of appeal on the basis of the collateral order doctrine.

In this court, Cassirer filed a motion to dismiss as to issues other than those pertaining to sovereign immunity on the ground that appellate jurisdiction is lacking. ³ The original panel agreed that the district court's denial of motions to dismiss for lack of personal jurisdiction and case or controversy is not immediately appealable as a collateral order. Cassirer v. Kingdom of Spain, 580 F.3d 1048, 1054-55 (9th Cir.2009). The panel held that § 1605(a)(3) does not require Spain to be the entity that expropriated the painting in violation of international law, and that the Foundation, which owns the painting, engaged in sufficient commercial activity in the United States to satisfy the FSIA. It further held that exhaustion is...